At Commercial Partners, we help uncover and resolve issues with a property’s title. These issues are oftentimes discovered when researching a property that has become available for sale, and they are referred to as “clouds” on a title. We pride ourselves in helping resolve these title issues for our clients so that they can purchase a property with a clean title, but if a seller can avoid problems with their title, it makes the process much easier on everyone. In today’s blog, we share some tips for property owners who want to prevent clouds from developing on their title.
Types Of Title Clouds
Before we explain how you can work to prevent title defects from developing on your property, let’s take a closer look at the types of clouds that can arise if you’re not careful. Some common clouds or defects with a property’s title include:
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Liens
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Clerical errors
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Easements
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Encroachments
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Ownership disputes
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Fraud
Some of these defects are more preventable than others, but there are still some steps you can take to mitigate your risk of a defect developing on your title.
Preventing Property Title Defects
Let’s explore some of the ways you can work to keep clouds from developing on your commercial property’s title.
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Stay Up To Date With Payments - One of the most common clouds that can develop on a title is a lien. If you fail to pay your mortgage or you don’t settle up with the county for your property tax bill, a lien may be placed on your property. This cloud can be resolved by paying back what you owe - in addition to any penalty fees or interest. Avoid lien defects by staying up to date on your payments.
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Clear And Detailed Records - Keep clear and detailed records pertaining to your property. Also, make it a point to review all documents related to your property for errors. A misspelling in a name, an incorrect address or another simple clerical error can lead to a title defect. Review all documentation related to your property to ensure the information is correct.
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Survey Your Land - You may assume that you know where your property ends and your neighbor’s begins, but have it surveyed if you’ll be doing any work that is remotely close to a property line. A misplaced fence can lead to an encroachment defect on your property. If some part of your property encroaches on a neighbor’s land, you may find a defect on your title, so have the area surveyed so you know exactly where your property lines are.
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Consider Your Heirs - Nobody likes to think about what’s going to happen when they are gone, but if you’re like most people, you want to help make the transition a little easier on your family. Working with a team like Commercial Partners can help get a spouse named on a title so that there are no custody issues should you die before them. You can also buy out any other owners or leave clear instructions as to how the property should be handled after you pass so that ownership defects don’t develop on the title after you’re gone.
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Fraud Prevention - Finally, make it a point to regularly keep tabs on your property, especially if it’s something that you don’t visit regularly, like farming or hunting land. Many counties allow you to register for free fraud alerts with the county clerk’s office. This means that they will alert you in the event any documents are filed in regards to specific properties or addresses. While rare, someone could try to pass off a fake deed at the clerk’s office suggesting that you are signing over the property to them. Without fraud alerts or regular monitoring, this deed could be accepted and force you to battle the matter out in court. This type of custody dispute would cloud a title. Check in with the county clerk’s office once a year to make sure there have been no unexpected changes with paperwork associated with your properties.
For more information about preventing title defects or resolving them, reach out to the team at Commercial Partners today at (612) 337-2470.